- PerkinElmer has been a huge beneficiary of Covid-19 thanks to its diagnostics business.
- Shares have done well this year, but momentum has been reasonable.
- Additional earnings power provides a huge windfall, as the market has been reasonably conservative in pricing/extrapolating current trends.
PerkinElmer is a long-term hidden gem that has created a lot of term value for investors over the past decade. A combination of good positioning towards attractive growth markets, combined with bolt-on M&A, has been a key driver behind decent long term returns for investors.
So far in 2020 shares have actually enjoyed a boost thanks to Covid-19 and given this price advancement as well as action on the M&A front, it is time to update the investment thesis.
The Old Thesis
My last take on PerkinElmer dates back to the summer of 2017 when the company announced the $1.3 billion purchase of EUROIMMUN. This purchase followed the sale of its medical imaging business to Varex Imaging and given the share price performance of Varex ever since, this, arguably, has been a good decision.
